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Food vs. Fuel The Role of Biofuels in Climate Policy Gernot Klepper The Kiel Institute for the World Economy
Conference on the Economics of Climate Change and Sustainable Development Chia Sep. 27th – 28th 2007
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Outline • • • • •
The World Biofuel Market Policy Objectives and Economic Perspectives GHG-Balances and MACs for Biofuels Food vs. Fuel Open Questions: – How much Biomass is available at what cost? – Modelling land use conflicts – Biomass Certification
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World Transport Fuel Demand (2005)
Alternative fuels amount to 4% of global fuel consumption, The share of Biofuels is 1%
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Bioethanol Production (World 2005) South America 35%
Other EU 10%
Asia 14%
France 30%
UK 9%
Oceania 0%
Sweden 4%
EU 6% Other Europe 3% Africa 1% N&C America 41% Quelle: F.O. Licht
45 Mio. m³ Ethanol were produced in 2005 , in 2006 50 Mio. m³ are expected
Spain 15% Germany 18%
Poland 7% Italy 5%
Hungary 2%
Only about 2,7 Mio. m³ were produced 2005 in the EU, for 2006 3,1 Mio. m³ are expected
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Production of Biodiesel (World 2005) Others EU-25 10% Slovakia 2% Czech Rep. 4%
RoW 8% USA 7%
Poland 3%
EU 85%
Italy 12%
Germany 53%
France 16%
Quelle: Diester Industrie International/ EBB
Worldwide Biodiesel production is 3,8 Mio. t in 2005
Of which 3,2 Mio. t are produced in the EU, more than half of it in Germany
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OECD-FAO Forecast for Ethanol Production Brazil
Canada China
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EU-Goals for Biomass in the Energy Mix • 69 MtOE (4%) Primary Energy from Biomass today • 150 MtOE Primary Energy from Biomass until 2010 („Biomass Action Plan“) • 20 % Renewables until 2020 („Renewable Energy Road Map“) • 10 % of Fuel Consumption until 2020 with Biofuels („Renewable Energy Road Map“) • 43 MtOE Biofuel Potential in the EU (EEA)
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Support for Biofuels • • • • • •
Tax exemptions Tariffs & Quotas Product Specifications Mixing Requirements Agricultural Subsidies Investment Subsidies
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Biomass Uses Biomass Biomass Food Food
Biofuels Biofuels 1. 1. Generation Generation
Other Other Bioenergy Bioenergy 2. 2. Generation Generation
Ethanol Ethanol
Lignocellulosis Lignocellulosis Ethanol Ethanol
Biodiesel Biodiesel
„Design „Design Fuels“ Fuels“ „Bio-Hydrogen“ „Bio-Hydrogen“
Non-energetic Non-energetic uses uses
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Biodiesel
Reines Pflanzenöl
Bioethanol aus Zucker bzw. Stärke
Bioethanol aus Lignozellulose
BtL
(Biomethan aus Silomais)
BioWasserstoff
Bruttokraftstoffertrag (GJ/ha bzw. l Kraftstoffäquivalente/ha)
51 / 1408
51 / 1420
Zucker: 132 / 4054 Stärke: 54 / 1660
21 / 640
135 / 3907
178 / 4977
160 / 4742
Nettoenergieertrag (GJ/ha)
38
35
Zucker: 88 Stärke: 30
18*
118
113
120
(in% des substituierten fossilen Kraftstoffs)
5,5
ca. 0,7
Zucker: 0 Stärke: 1,0
0
0
0
0
Produktionskosten (€/GJ)
19
14
Zucker: 24 Stärke: 22
30
30
21
26 - 37
Faktor 1,2 bis 1,3
Faktor 1,3
im Vergleich zu BRA: Faktor 2,5
k.A.
k.A.
z.Z. kein internationaler Wettbewerb
k.A.
CO2e-Einsparung t/ha
3,4
3,3
Zucker: 7,2 Stärke: 2,9
1,6
10
ca. 8
k.A.
CO2eVermeidungskosten (€/t CO2e)
154
83
Zucker: 290 Stärke: 252
295
272
273
k.A.
Aufwand Markteinführung
In 2005 ca. 1 Mrd. € Steuerausfall
Noch nicht im Markt, F&E erforderlich
Noch nicht im Markt, evtl. Pilotprojekte
Noch nicht im Markt, F&E erforderlich
Erzeugung
Internationale Wettbewerbsfähigkeit
Förderung In 2005 ca. 130 In 2005 ca. 214 Mio. € Steuer- Mio. € Steuer- nötig, eher F&E ausfall erforderlich ausfall
Biogas
Source: Schmitz et al. 2006
How Much Climate Mitigation?
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SecondMitigation Generation Biofuels How Much Climate ? Biodiesel
Reines Pflanzenöl
Bioethanol aus Zucker bzw. Stärke
Bioethanol aus Lignozellulose
BtL
(Biomethan aus Silomais)
BioWasserstoff
Bruttokraftstoffertrag (GJ/ha bzw. l Kraftstoffäquivalente/ha)
51 / 1408
51 / 1420
Zucker: 132 / 4054 Stärke: 54 / 1660
21 / 640
135 / 3907
178 / 4977
160 / 4742
Nettoenergieertrag (GJ/ha)
38
35
Zucker: 88 Stärke: 30
18*
118
113
120
(in% des substituierten fossilen Kraftstoffs)
5,5
ca. 0,7
Zucker: 0 Stärke: 1,0
0
0
0
0
Produktionskosten (€/GJ)
19
14
Zucker: 24 Stärke: 22
30
30
21
26 - 37
Faktor 1,2 bis 1,3
Faktor 1,3
im Vergleich zu BRA: Faktor 2,5
k.A.
k.A.
z.Z. kein internationaler Wettbewerb
k.A.
CO2e-Einsparung t/ha
3,4
3,3
Zucker: 7,2 Stärke: 2,9
1,6
10
ca. 8
k.A.
CO2eVermeidungskosten (€/t CO2e)
154
83
Zucker: 290 Stärke: 252
295
272
273
k.A.
Aufwand Markteinführung
In 2005 ca. 1 Mrd. € Steuerausfall
Noch nicht im Markt, F&E erforderlich
Noch nicht im Markt, evtl. Pilotprojekte
Noch nicht im Markt, F&E erforderlich
Erzeugung
Internationale Wettbewerbsfähigkeit
Förderung In 2005 ca. 130 In 2005 ca. 214 Mio. € Steuer- Mio. € Steuer- nötig, eher F&E ausfall erforderlich ausfall
Biogas
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Abatement Costs of CO2 800 700 600 500 400 300 200 100 0 Wind
Water
Quelle: BMU, BMWi, DLR, meó
Biomass electr.
BioPhotovoltaics ethanol
BioBiodiesel ethanol BRA
ETS
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Threshold Prices for Crude Oil (2004)
Source: OECD 2006
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FAO Food Outlook
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Climate Change and Water Availability The most important spatial pattern (top) of the monthly Palmer Drought Severity Index (PDSI) for 1900 to 2002. The time series (below) accounts for most of the trend in PDSI.
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Cereal Projections based on Climate Models
Source: Global Agro-ecological Assessment for Agriculture in the 21st Century: Methodology and Results. IIASA 2002.
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OECD Crop Market Study Source: M. v. Lampe: Agricultural Market Impacts of Future Growth in the Production of Biofuels, www.oecd.org/dataoecd/58/62/36074135.pdf; schriftliche Auskunft des Autors
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Prices for Agricultural Products Wheat (€/t)
Crude Palmoil (MYR/t)
Soybean Oil (US$/lb)
Corn (US$/bushel)
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World Market for Biofuels •
Important suppliers of Biodiesel: – Indonesia – Malaysia
•
… of Ethanol: – Brazil – USA (Netimporter)
•
•
Exporters supply large amounts of food products and possess significant Biodiversity. Certification of Biofuels – CO2 Certificate – Sustainability Certificate
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Total Energy Availability 52.0
Total NPP 6.7
Crop
11.3
Pasture 0.9
Abandoned
Total Fossil Fuel
7.4
Petroleum
2.9
Coal
1.5
Natural Gas
2.9 0
10
20
30
40
50
60
Carbon (Pg C / yr)
Source: Chris Field, „Biomass Energy“. Presentation at the GCP-Meeting, South Africa, 8/2007.
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Unresolved Questions • Land use decisions and food prices • GHG-Balances for Biofuels in Developing Countries • Other ecologic effects of the expansion of areas for Biofuel production • Indirect effects of land use changes – „Leakage“ • Second generation Biofuels – – – –
Technical feasibility Biomass potential as feedstock Conflict with other biomass uses Economics of 2. generation biofuels
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Policy Issues • • • • • •
Integrating Biofuels into Climate Policy Managing Competition for Bioenergy Allocating Bioenergy Efficiently Certification of Biofuels Introducing Biofuels into the ETS Distribution Effects of Biofuel Promotion – Within Regions – Between Regions
